Simpson Column: What’s to become of a once-great company?
Published: June 19, 2009
America Online (AOL) was once the largest Internet company in the world. It rivaled, and even threatened, Microsoft’s dominance — just as Google is now doing. I
believe it has the ability to become great once again.
First, a little background …
Prior to the dot com bust, AOL pulled off a coup and purchased media goliath Time-Warner. I remember all the hype as to how this union would bring the
distribution of Time-Warner content to AOL subscribers; an advantage that other online portals (MSN, Google, etc) would not have.
This was back in the day when one of the more popular online catch phrases was “content is king.”
AOL went through a number of changes just before the crash. Not only was it struggling to get a footing in the broadband arena (to this day it probably remains
king of slow speed dialup), but it shifted the revenue model from subscription fees to advertising.
Time-Warner was supposed to help foster the distribution of its media empire to AOL members by leveraging its high-speed cable network. At the time, I was
working in the Broadband department of AOL and couldn’t believe the infighting that was allowed to happen between different Time-Warner divisions. Although I
wasn’t very high up the proverbial food chain at the company, it was pretty clear that the reality of merging Time Warner content with the AOL client (stand-alone or
Web) was not going to happen as people expected. Nor was the delivery of Time-Warner content over the broadband network going to happen as smoothly as
many outsiders expected.
To this day I wonder how much of the rigmarole, due to all the mini-empires that existed throughout Time-Warner, could have been prevented by more professional
middle management.
It wasn’t long before I came to the realization that many people didn’t like the idea that a “grand old” media company was bought out by a “new kid on the block”
Internet company, and these detractors were intent on fighting tooth-and-nail to impede progress … even to the point of damaging their own self interest.
On a side note — it’s ironic that recent news reports refer to the spinoff of AOL. When the original merger occurred, it was referred to as the purchase of Time-
Warner by America Online. How times have changed … but I digress.
So, enough of the history lesson. Where does that leave AOL now? Content may still be important, but I don’t think its king of the Internet arena anymore.
I believe AOL should focus on building a powerful and comprehensive social networking platform.
People are compelled to stay in touch with each other. Chat rooms are ubiquitous. Even first-person shooter games have chat rooms. SMS texting has increased
so much that according to research conducted during the second quarter of 2008, Nielsen Mobile research revealed that, “The typical U.S. mobile subscriber sends
and receives more SMS text messages than telephone calls.” Meetup has carved out a nice niche when it comes to social event planning.
People keep in touch with professional contacts (and friends) through applications such as Plaxo and LinkedIn. In fact, the need to stay in touch with the
community is so strong that many folks even send and receive updates throughout the day using Twitter.
Many years ago AOL started a project called AOL Groups; this application was the precursor of today’s popular social networking sites. It ended up being
discarded, which was, unfortunately, a gigantic mistake.
If AOL could combine the social networking of Facebook.com with event planning from Meetup.com and the contact management of LinkedIn.com — throw in
address book updates from Plaxo and a tweet utility for good measure — well, it would have one killer viral app.
I am not sure of the current state of AOL’s development team. If they have let all the developers go and now employ mostly advertising specialists it will be an uphill
battle. Nevertheless, everyone should remember that AOL was once called a dinosaur and considered no threat to Prodigy and CompuServe.
James Simpson lives in Lake Ridge.
Advertisement
Reader Reactions
“Incompetence - When you earnestly believe you can compensate for a lack of skill by doubling your efforts, there’s no end to what you can’t do.” - Al Mostonest
So, having failed to master the use of basic hand-tools needed to remodel his own basement, Mr. Simpson is now venturing into the arcane world of marketing consultant specializing in turning around Internet Services Companies.
I guess he feels competent to do this as it only took him about one year after the service started to discover the on-line comments threads in the local newspaper he writes columns for.
And now that the Republican Party has decided that on-line social networks are their future for capturing the under-60-angry-white-male crowd, Mr Simpson has even discovered these networks, also!
Perhaps in a future column Mr Simpson can reveal astonishing new facts about the color of the sky, the direction the sun rises each morning, and the religious preference of the Pope.
http://www.linkedin.com/companies/aol
Key Statistics about AOL
Top Locations
Washington D.C. Metro Area (500+)
Is this local news?
Jeff is correct about AOL. The “new” supposedly high tech methods of managing business has been the downfall of many companies like AOL over the past few years. Attempting to grow a company only with ad clicks is not a good business model. Once a lucrative area the public is now so overwhelmed with advertising - ie; tv programs 15 min program 15 ads - they are largely ignored. But those folks that make a living from advertising are so immersed in their brilliance they swear by their tactics. I hope AOL does make a comeback using its old methods and style such as protecting children from the violent and pornographic sites now on the internet etc.. There should be at least one service provider with morals and a conscience.
“I would not join any club that would have someone like me for a member.” – Groucho Marx
“I would not bet on any company that would hire James Simpson to do anything.” – Al Mostonest
Yawn… Boring… Old news… Who cares? That being said, I suppose James Simpson will next propose that Hollywood do remakes of “Battleship Earth” and “Ishtar,” with the original casts! Or bring back the Ford Edsel or Chevy Corvair… Or reinvent the eight-track stereo… Like we need to revive another bloated, wannabe Yahoo corporation that doesn’t produce anything real, that is “too big to fail,” that has proven its incompetence, and that is losing money by the truck load! And that fact that James Simpson thinks this is a viable company should give us pause. And the fact that AOL (America On Lithium) would ever hire Simpson (to do WHAT?) is not a selling point. Bah, sir! This is patent nonsense!
Al Mostonest, PW County
Internet Consultant
Advertisement